The WeekendInvesting Newsletter is a daily newsletter that summarizes all the stories we cover during the day(market nuggets), including the daily byte that we shoot every evening. This newsletter will be delivered to your email every evening on market days, providing you with a wealth of market-related information. The newsletter includes both summaries and long-form blogs for all the market nuggets covered. These blogs are also linked to the videos we shoot, so you can choose to watch or read the content according to your preference.
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Nifty on the Daily Chart
The last two sessions of the week were notably weak, and after Friday’s market close, the Israel-Iran conflict escalated to a whole new level with direct attacks from both sides. Only Monday’s opening will reveal the true extent of damage this geopolitical event might inflict on the markets. Additionally, reports suggest that the Hormuz Strait has been shut, a crucial chokepoint that handles 20–30% of global oil shipments. Oil market experts are warning that prices hitting triple digits is no longer out of the question.
With that backdrop, markets may face considerable turbulence in the upcoming week, especially if oil spikes sharply on Monday. The extent and duration of this conflict remain uncertain, but there’s hope that cooler heads will prevail and a ceasefire might emerge by the end of the weekend. Regardless, it’s clear that geopolitics is becoming messier and more unpredictable by the day.
The world is no longer the relatively peaceful place it was not so long ago. Constant conflicts and tensions are now becoming a norm, underscoring the growing need for proper asset allocation and hedges. Fortunately, India remains in solid shape.
The domestic economy is showing robust growth, inflation is under control, domestic flows are healthy, and the outlook is validated not just by the RBI but also by international institutions like the IMF. There’s little reason to doubt the structural path India is on, but given the external uncertainties, that path may become somewhat bumpy in the near term.
Nifty – Weekly Chart Perspective
Looking at the Nifty chart, the index showed four days of sideways action followed by a sharp drop on the fifth day. Although there was some recovery, the index still closed the week down by 1.14%. On the weekly chart, this marks the fifth straight week of consolidation without any meaningful breakout. This prolonged pause may indicate that the market is gearing up for a bigger move, but for now, more time in this range appears necessary.
S&P 500 Overview
The S&P 500 also stalled this week with a modest decline of 0.39%. What’s remarkable is how the U.S. market, despite fears of recession, high inflation, elevated yields, and multiple headwinds, is still hovering near its all-time highs. This contradiction between economic data and market price action highlights an important lesson: follow the price. Liquidity continues to flood the system, and perhaps expectations of even more liquidity ahead are keeping the markets buoyant. That could eventually lead to fresh all-time highs for U.S. equities.
GOLD Overview
Gold rallied 4% this week, driven by the heightened geopolitical crisis in the Middle East. It closed above ₹10,000 per gram for the first time ever—a historic high on a weekly basis. Whenever an asset closes at a 52-week or all-time high, it sends a strong signal about underlying bullish momentum. With tensions still rising, further upside cannot be ruled out in the short term.
Dollar Index Overview
Meanwhile, the dollar index is falling as expected—deliberately engineered by the U.S. administration. The decline has been swift and substantial, aligning with their objective of weakening the dollar to stimulate domestic growth and exports.
Benchmark Indices Overview
Across benchmark indices, all frontline segments ended the week in red. Small caps fell by about 0.5%, Nifty 50 and Nifty 500 were down nearly 1%, midcaps lost 1.18%, and Nifty Next 50 was the worst hit, down 1.5%.
Sectoral Overview
From a sectoral perspective, Capital Markets, which had been leading in recent weeks, dropped 4.3%. Tourism fell by 3.4%, Real Estate by 3.1%, Public Sector Banks and FMCG both by 2.3%. These were some of the more prominent losers. On the positive side, Pharma gained 1.4%, Media rose 1.2%, and IT bounced 3.2%—the only three sectors that closed the week with gains.
The momentum score quilt reflects shifting trends across timeframes. Defense, Capital Markets, Central Public Sector Enterprises (CPSEs), Private Banks, and Oil & Gas continue to rank among the top five, though in the short term, some of these sectors are losing steam. Pharma, Oil & Gas, CPSEs, Media, and IT have recently gained momentum and moved up the rankings. In contrast, FMCG, Tourism, Consumption stocks, Autos, and MNCs remain consistently at the bottom, showing prolonged underperformance across periods.
A Dose of Knowledge for you !
Rebalance Update
We give advance notice here on the upcoming changes in your smallcase for Monday. This advance notice can be used to ignore Monday’s update if there is no change. If there is a change indicated you can use the smallcase app or log in to weekendinvesting.smallcase.com to see the rebalance.
Note: We are not including LIQUIDBEES as an ADD or an EXIT count.
